Africa-Press – Zimbabwe. THE effective tax rate for platinum group metals (PGM) producers has surged to 77%, up from 70%, as rising royalties, government levies, and statutory obligations squeeze profitability, the Chamber of Mines of Zimbabwe (CoMZ) warned Thursday.
CoMZ CEO Isaac Kwesu said the sharp increase threatens the viability of mining operations, calling the current tax regime “unsustainable.”
The steep rise in fiscal burdens comes amid ongoing economic challenges for Zimbabwe’s key mining sector.
“When you factor in royalties, government levies, and statutory obligations, the total tax burden now stands at around 77%,” Kwesu said during the CoMZ’s annual conference in Victoria Falls.
“This level of taxation is unsustainable and threatens the viability of operations.”
The alarming hike raises concerns over potential mine closures, job losses, and reduced investment in one of Zimbabwe’s most critical industries.
Despite these headwinds, Kwesu remained optimistic about the sector’s long-term potential.
“With new players such as Karo Resources and Bravura entering the market and expansions underway at Zimplats, Mimosa, and Unki, there’s strong potential for a rebound,” he said.
He urged the government and stakeholders to safeguard investment momentum by addressing regulatory, financial, and infrastructure bottlenecks.
“All current producers have local enterprise development programmes supporting SMEs and community initiatives. But they need an enabling environment to continue,” Kwesu said.
For years, the platinum sector has been one of Zimbabwe’s top foreign currency earners, consistently contributing over 40% of total mining exports, second only to gold.
However, in 2024, this share contribution plunged by a massive 14 percentage points owing to declining global prices and mounting operational challenges.
Export earnings from PGMs fell from US$1,55 billion in 2023 to US$1,5 billion last year, and that “trend is worrying.”
“The decline in prices and output is threatening the viability of operations across the sector,” Kwesu said.
“Prices for key elements in the PGM basket have plummeted to levels last seen a decade ago. This has severely undermined the sector’s contribution to the economy.”
PGMs, which include platinum, palladium, and rhodium, contributed an average of 42% of Zimbabwe’s total mining exports over the past five years.
However, their share fell sharply last year as gold surged ahead to contribute more than 43% to total mineral exports.
This has been exacerbated by frequent power outages, rising operational costs, and foreign currency shortages.
The PGMs industry is a significant employer, supporting over 10 000 jobs, about 20% of total mining employment.
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